On the Bank of Russia FX policy

Effective from 13 January 2014 the Bank of Russia cut the amount of target FX interventions from $60 million to $0 a day. This adjustment was made to ensure further increase of the rouble exchange rate flexibility in the context of the ongoing transition to the floating exchange rate by 2015.

Decreased target interventions would lead to higher sensitivity of the operational band borders of the dual currency basket to the amount of FX interventions aimed at smoothing the excess volatility of the rouble exchange rate. All else equal, the implemented modification would reduce the scale of the Bank of Russia’s presence in the domestic FX market, which would enhance the effectiveness of the interest rate policy.

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